Accounting

Quick Answers – Second Stimulus Payment

Quick Q&A on the second round of Economic Impact Payments

The IRS and the Treasury Department began issuing a second round of Economic Impact Payments, often referred to as stimulus payments, last week and will continue through mid-January.

The IRS emphasizes that there is no action required by eligible individuals to receive this second payment.  The payments are automatic.

As Tax experts, the F&C is here to help sort out the information and provide you with simple answers.

Who gets the stimulus payment?

Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment.

How much should you expect?

Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child.

Most people who have an adjusted gross income for 2019 of up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, will receive the full amount of the second payment.

For filers with income above those amounts, the payment amount is reduced.

How will you receive it?

Direct deposit payments are being made first to those that have valid routing and account information on file for direct deposit purposes.

Paper checks also began going out and will continue to be sent through January.

Some people will be mailed debit cards in January, and the IRS urges people to carefully check their mail.

When should you receive it?

The direct deposit payments may take several days to post to individual accounts. Some Americans may have seen the direct deposit payments as pending or as provisional payments in their accounts before the scheduled payment date of Jan. 4, 2021, which is the official date funds are available.

Mailed payments will require more processing and mailing time. Those who reside abroad will have longer wait times for checks as disruptions to air travel and mail delivery in some countries will slow delivery.

How do you check on the status of your payment?

You can check the status of both your first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov/GetMyPayment.

The Internal Revenue Service urges people to visit IRS.gov for the most current information on the second round of Economic Impact Payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what’s available on IRS.gov.

Payment not received or less than expected?

If you have not received your full payment by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit on your tax return.

If you received a partial Economic Impact Payment, you can take the Recovery Rebate Credit for any remaining amount you’re eligible for by completing line 30 of the 2020 Form 1040 or 1040-SR.

Changing bank account or mailing information

Because of the speed at which IRS issued this second round of payments, some payments may have been sent to an account that may be closed or no longer active. By law, the financial institution must return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active.

The IRS cannot change payment information, including bank account or mailing information.

More information

For more information about Economic Impact Payments and the 2020 Recovery Rebate Credit, visit IRS.gov/eip.

Finley & Cook, CPAs

Serving clients, providing solutions, and enabling success since 1947.

Jonathan Gauss
Tax Partner, Finley & Cook
jonathang@finley-cook.com

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